Talk:Protectionism
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The citation, 5, does not support this statement...
However, most economists agree that the benefits from free trade in the form of consumer surplus and increased efficiency outweigh the losses of jobs by at least a margin of 2 to 1, with some arguing the margin is as high as 100 to 1 in favor of free trade.[5]
In fact, the citation is refuting the 100 to 1 ratio. Eremurus (talk) 05:14, 9 October 2009 (UTC)
Hi timetheftkid.
Responses to your comments below (TP = traditional protectionism/protectionist):
Look as I said a google search brings up no mention of this definition, and several other people have attempted to edit this page after having seen that definition. Could you please cite some source that provides/supports such a defintion, since the defintion is rather obviously obscure to many people who have visitied this page.
Response: Sure, if you look at the wikipage on "tariffs", you will see two types of tariffs: "revenue tariffs" (the normal, 10-30% used to feed government coffers, allowing for countries to reduce/eliminate taxation on domestic manufacturing, and to escape income taxes, which is how the US ran from 1789-WWII) and "protective tariffs" (those are tariffs of 1000000% which force the consumer to buy domestically, and as a result the tariff is not meant to be collected, so you need the high income taxes and domestic manufacturing taxes as well.) Traditional protectionism (pre-WWII) used very lucrative revenue tariffs. Modern protectionism is just concerned with keeping particular domestic factories by using protective tariffs.
I don't really see much distinction, Protectionsim as normally defined is increasing the price of foreign goods relative to domestic goods through policy increasing the attractiveness of domestic goods. The most common form is by applying high taxes to those foreign goods and applying low taxes to domestic goods.
Response: The difference between the two forms is: Do you want imports? For a TP: ABSOLUTELY!!! You need imports to pay the taxes--tons of tax-loaded wonderful imports, so domestic manufacturers have no taxes to pay and we have no income taxes ourselves. For a modern protectionist: NO WAY!!! I don't anything foreign entering the shores. Place tremendous, never-to-be-collected tariffs so my lazy, inefficient industry will survive. The reason why both need to be described is because free traders consider both types to be "protectionism", however they have radically different goals. That is what I am trying to specify.
You do not have to agree with either form of protectionism--no more than you need to agree with an article on voodoo--but what we do need to have is an article that explains what TP's like Buchanan and Roberts, etc. think and *why* they think what they do. That's what I'm trying to do here. Next, the reader can go to the "free trade" article and see what free traders think and why they think what they do as well.
We don't want to write a propaganda piece (like the free trade article ;) -- everything needs to be truthful, no white lies either -- but it shouldn't be a free trade vs. protectionist debate; no more than the article describing the beliefs of one political party need to be refuted using the beliefs of the other.
It is defnitely NOT TRUE that there is some point in time where taxing or otherwise legislating foreign goods out of the market became dominant.
Response: I agree with you, but most free trade articles attack modern protectionism, as if that *is* the goal. So traditional protectionism needs a review--where the emphasis is on exempting domestic rather than foreign products from taxation, and the benefits that TP's see with that.
Why is it, for example, so ridiculous to add 10% to a Toyota made in Japan, and use the tax receipts from that to give complete tax-free access to a domestically made Toyota in America? If you make it 0% for Toyota in Japan, you'll have to just tax their factories in the US instead (i.e. reverse protectionism). Government needs money to run--no such thing as a free lunch.
Colbertism was exactly that and was very, very early. Recently some asian countries have maintained tarriffs low enough that foreign products enter the country for the sake of keeping their domestic industries under pressure.
Response: I disagree with you here--lowering the tariffs increases tax revenue (by turning the tariff from a protective one into a revenue tariff), giving the countries the $$$$ to drop property taxes, corporate taxes, income taxes, etc., on their local industry. Rare is the country that really *wants* domestic industries to be hurting.
I think that all this stuff would better be discussed by just explaining that tariffs have two purposes, both as an easy source of revenue and as a means of giving domestic industries an advantage. Any tariff will give at least a slight advatnage, -->but they can be set high enough to eliminate competition altogether.<--
Response: Which is the point of the MP (Yay! My $20hr job is not affected by 20c/hr labor overseas!) but definitely NOT the goal of the TP (they want tax revenue in--you need imports to pay the taxes.) It is still important to separate the two and explain their disparate thought processes--because too many TP's get categorized in the easy-to-refute MP category.
Traditional protectionism only helps borderline manufacturing location decisions, it gives the ability to tell Toyota that if they keep the factory in Japan, they'll be looking at revenue tariffs, but if they move it to America none of them will even have to look at the IRS, property taxes, etc., or any other form of government fees.) Nothing will happen to the $20/20c hour case--except tax revenue being collected here, to be rebated somewhere else domestically.
As it stands, the linked articles under examples of protectionism CITE MOTIVATIONS BEHIND THE POLICIES PURSUED IN THOSE HISTORICAL EXAMPLES THAT ARE CONSISTENT WITH WHAT IS DEFINED AS "MODERN" PROTECTIONISM IN THIS PAGE you are therefor implying that these pages are wrong or else you are using "traditional" in some way that is unusual. i.e. Traditional protectionism is not referring to the form of protectionsim that has been undertaken historically. THis at least deserves a link or citation to justify/clarify this term.
Response: That is true, but I did not put *any* of those examples of modern protectionism in. Those were there from the previous writers. The several links I put in were in are at the very bottom, external links. I've just started. I want the protectionist page to be just as filled up, as beautifully explaining this philosophy as the free trade page explains that one.
There are counters to this position about sticking domestic industry, like for example that products from foreign countries are taxed at their point of origin by their governments as well.
Response:
1.) Not for *traditional* protectionism--because that taxation does not go into US coffers, it goes into the foreign ones. For TP, it is perfectly OK for a product to be made overseas because labor is so much cheaper there (however, there will be revenue tariffs applied), it is NOT OK because, by making foreign-labor tax free, we had to hike up domestic taxation so much that it drove manufacturers overseas. That is why traditional protectionists see free trade as reverse protectionism.
If you shut off foreign-made products as a source of revenue, you will need to get it elsewhere--corporate and income taxes, property taxes, countless fees, falling domestically. Government needs $$$$--lots of it. Furthermore, because now domestic industry is much more expensive, it moves overseas, so you lose tax revenue, plus people are unemployed and no longer paying taxes, now need welfare, committing crimes, etc., etc., you need more and more and more tax dollars needing *more* taxation domestically, causing a snowballing effect. Traditional protectionists see the revenue tariff as a very tax-efficient and healthy form of taxation, and the income tax as very inefficient.
2.) Even if there are counterargumentss, I'm not sure that they should be given if they are not thought of by MP's/TP's. This article is explaining the thought of protectionism, *not* a debate of free trade vs. protectionism. For example, "US Democratic Party" should be able to describe their beliefs without every sentence having a Republican rebuttal.
> Income taxes are changed everywhere, these will be reflected already in the price of the foreign products.
Not really, but they have different % rates if they did. As I understand it, India's primary source of tax revenue is still tariffs. And I've queried a mainland Chinese in the US, income taxes are very low/nonexistent in China in comparison to the US because they heavily employ revenue tariffs. (e.g., the deal to bring China in the WTO called for America to retain its 2% tariffs on Chinese products but China could still keep its 25% or so revenue tariffs on ours. Look at this article: http://www.eagleforum.org/psr/1998/june98/psrjune98.html, but search for "35%" and you will see the story here.) The US had no income tax before 1913--revenue tariffs were all that were needed.
> So heaping taxes on foreign products puts them at a huge disadvantage. If other governments duplicate your policies then all goods will be highly taxed. Your exports will be taxed and decline as well.
Response (from the perspective of a USA TP):
1.) OK -- you're saying that traditional protectionists are wrong with their beliefs. But those are still their beliefs, and that is what we're to describe here.
2.) That's fine. Other countries need tax revenue as well, and they should also tax foreign products and give full tax exemptions to their internal industries. Using the example of the US and Mexico, Mexico has way too many free trade agreements (http://en.wikipedia.org/wiki/Mexico#Economy, last paragraph), but they tax domestically so much that domestic industries are starved out. That's why Mexico is so poor (and why the US gets massive illegal immigration of desperately poor people)--when emphasis should be made on exempting local manufacturing from taxation Mexico is instead concerned about exempting Hong Kong tycoons from taxes instead. If Mexico took care of itself with revenue tariffs the US would also benefit.
3.) Foreign countries already are doing that (see China and 35% quote above), even though we aren't taxing them, or doing so neglibly. So the current system has destroyed our manufacturing base. We have next to nothing left to sell anyway.
4.) Keep in mind, an irrational fear of revenue tariffs can also backfire. To stop the recent dumping of Chinese textiles in the US, our trade representatives had China create an "export tariff" on those products with the revenue going to the Chinese treasury instead of the American one. Because Americans can no longer stomach revenue tariffs, we pay a higher price on the product due to the export tariff but none of the money goes to our own treasury.
IF you want support protectionism why don't you just point out that many foreign governments give incentives like tax holidays to producers, which is obviously not in keeping a level playing field and that many beleive that tariffs are the best way to redress this behavior.
Response: I want to explain what TP's think (and MP's as well), even if they think wrong. Then, a person can read the free trade article and be fully aware of both philosophies, actually, all three. This is just like explaining a religion or a political party--what they think and why they think what they do, even if you think what they think is ridiculous. (I think what free traders think is ridiculous--but I don't touch the free trade article, because it explains what they think.)
At any rate, TP's want to give a 365-day-of-the-year tax holiday to domestic manufacturers, and encourage all other countries to do the same. Traditional protectionists are very pro-import--it is what pays the taxes. (It would be like saying that states that have a sales tax don't want anyone to buy anything--are you kidding? They love sales tax revenue.)
> However the consumer is not necesarilly made better off because he is paying high prices for imported goods.
Response: Indeed, a return to a heavy use of revenue tariffs are of no value if there would not be a big decrease in other forms of domestic taxation, as well as a radical increase in quality of life and standard of living. TP's think this will happen, MP's and free traders don't obviously.
But TP's have a different concern than the cheapest product--those are free traders, or just keeping inefficient jobs--MP's. Buchanan put it well here (http://www.theamericancause.org/a-pjb-050629-china.htm):
"The Chinese, however, are Hamiltonians – resolute and ruthless economic nationalists. They look out and see the same world our forefathers saw, a world of nation-states where the struggle for power and pre-eminence is eternal, where trade is not a game, but an arena of battle, where industrial and technological primacy eventually yield military and strategic supremacy, where those who sacrifice today rule the world tomorrow."
- Ugh, more Libertarian love for Communist China. The Chinese are not Hamiltonians, they are Communists building up dual-use industries to probably invade Taiwan in the future. Am I the only one who finds Libertarians as disgusting as liberals?98.165.6.225 (talk) 14:01, 4 September 2008 (UTC)
TP's think that there are larger considerations than just worrying about spending 20% more for a stuffed doll at Walmart, and that a citizenry that is concerned only about that will never really accomplish much of significance.
Thetimetheftkid 02:25, 12 October 2005
No, traditional protectionism is still to protect domestic industries--read the Buchanan quote again. The idea is to place revenue tariffs on foreign products and to use the income stream to reduce taxes on domestic manufacturing. That's where the protectionism comes in. It is the opposite of free trade, where the emphasis is to exempt foreign manufacturing from taxation at a cost of hitting domestic manufacturing (and taxpayers as well) with more taxes and fees. (Ther
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So (butting into the conversation) I'm just starting to study about all this economics stuff and I have to - from a layman's viewpoint - weigh in on this debate. First, I agree that the ideology of the protectionists should be presented in as rich an article as can be, to promote true discourse throughout; then I'd like to concurr with the notion that there are two types of protectionist theory - pro-revenue and anti-import (described herein as TP and MP), but seemingly everytime I read something about protectionism it tends to neglect the pro-revenue (TS) theory and only bash the notion of protectionism all together because it has become synonymous with anti-imports logic. I have no idea which theory is right, more accurate, smarter, more dangerous, or any of that, but how can I learn and/or decide for myself if someone feels like they don't agree with the logic and therefore stifles the conversation, which is what someone here was trying to say, correctly (I might add!)
And why is that a free market doesn't benefit from protectionist oversight anyway? It seems everybody "sneaks" in a little Nationalist agenda or tariff or regulatory thingy - which is protectionism helping to nip/tuck the free market economy that inevitably bleeds somewhere and needs a band-aid for a spell, right? Why doesn't this type of logic have a theory of its own I can call it? Why is it always either/or instead of an amalgam that works?
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e's no such thing as a free lunch. Government needs $$$ to run.) Taxpayers can also benefit from lower tax rates, partly because of this new revenue stream, but also because of the social benefits of low unemployment and meaningful domestic work: less crime, social problems, welfare, etc.
Buchanan is a traditional protectionist, not a modern protectionist. Lumping him generically in a "protectionist" category causes people to think the latter instead of the former. You seem to be mixing up traditional protectionism vs. modern protectionism, which is why it is important to maintain a distinction. The goal of the former is to have a solid manufacturing base, lucrative tax-$$$ wise world trade, and little or no income tax (i.e., US before 1915 or so), while the goal of the latter is just to force people to buy domestic to support inefficient industries.
Definition of protectionism
The section on traditional protectionism is wrong as far as I can tell. I know that government revenue has been cited by many proponents as a benefit of protectionsim, but the "protection" in protectionism has always referred to protection of industries, not taxpayers. Just look at all of the examples cited of famous policies. Any of those articles will cite the desire to protect domestic industry as the prime motivation for the policy. Furthermore a google of "traditional protectionism" yielded many people using such a term but none with defintion that emphasizes alternative revenue sources over protection of industry. As far as I can tell that is a side-benefit used by proponents to make the policy more attractive.
I put the Buchanan stuff in another section on US proponents of protectionism.
Thetimetheftkid 06:25, 10 October 2005 (UTC)
Recently this article was changed to define protectionism as
policy of relying on tariffs for government revenue in order to reduce or eliminate other forms of taxation, such as income and sales taxes. In protectionist theory, emphasis is placed on reducing taxation on domestic labor and savings at a cost of higher tariffs on foreign products. This contrasts from the free trade model, in which first emphasis is placed on exempting foreign products from taxation, with the lost revenue to be compensated elsewhere.
While governments certainly use tariffs to fund their ops and sometimes as a means of reducing reliance on income tax, that's not the meaning of "protectionism" as it's used by most journalists and economists -- that term is used almost exclusively to mean the protection of domestic industry, and in fact it's used to distinguish tariffs meant to protect from those meant to raise revenue. I can understand the impulse to cite other, more traditional views of protection and their less economically destructive ends, but it's confusing to define "protectionism" under that heading, since it is not what a modern reader will be expecting to find.
- Every single additional percentage point on a tariff rate boosts and protects American industry whether or not it is generating revenue. If you want to talk about a laffer curve version for international trade then that is fine, but tariffs always serve 2 purposes.98.165.6.225 (talk) 13:58, 4 September 2008 (UTC)
I've also elided a quote that was added --
One of the leading champions of traditional protectionism in the United States is Pat Buchanan. As he wrote in his 2004 book "Where the Right Went Wrong", "Tariffs raise the prices of goods. True. But all taxes--tariffs, income taxes, sales taxes, property taxes--are factored into the final price of the goods we buy. When a nation puts a tariff on foreign goods coming into the country, it is able to cut taxes on goods produced inside the country. This is the way to give U.S. manufacturers and workers a 'home-field advantage.'"
Quoting a political activist like Mr. Buchanan in an encyclopedia article seems to teeter uncomfortably close to espousing his point of view. We could use a contrary quote, but it seems to me that would just muddle the issue with partisanship.
Collabi 06:19, 31 August 2005 (UTC)
- Quoting any pro free-trade literature in an encyclopedia article seems to teeter uncomfortably close to espousing his/her point of view. We could use a contrary quote, but why bother, you free traders claim anything contrary to be "political in nature" and "heresy."98.165.6.225 (talk) 08:49, 13 June 2008 (UTC)
Yep, the article had a bizarre, and essentially wrong, definition. I rewrote it, but it was changed back by an anonymous user; glad to see things have been fixed, and that quotas are mentioned as well. "Reducing reliance on income tax" has historically had nothing to do with protectionism; on the contrary, protectionist states have tended to be high-tax states. Instead, this is a new justification for protectionism ("it'll cut your income tax and give our producers a home-field advantage") brought out by the likes of Buchanan; thus, not NPOV. ProhibitOnions 09:28:18, 2005-08-31 (UTC)
Lede, reverts
Below is the text as I have entered it. Make changes to it here, and we can argue over specific points. -Ste|vertigo 04:08, 9 June 2006 (UTC)
Protectionism, in its most generic sense, refers to any doctrine or policy which is claimed to protect (ie. enforce security) a group or entity by means of instituting mechanisms which restrict outside influences. In economics, protectionism refers to policies
whichwhich "protect" local industry and businesses by restricting or regulating trade between foreign jurisdictions, through methods such as:
- Subsidies - To protect existing businesses from risk associated with change, such as costs of labour, materials, etc.
- Tariffs - to increase the price of a foreign competitor's goods. ( Including restrictive quotas, and anti-dumping measures) on par or higher than domestic prices.
- Quotas - to prevent dumping of cheaper foreign goods that would overwhelm the market.
- Tax cuts - Alleviation of the burdens of social and business costs.
- Intervention - The use of state power to bolster an economic entity.
- Blockades - An extreme example of state power and considered an act of "economic warfare," a blockade is trade intervention as enforced by military power.
Comment: Blockades don't belong in this list.DOR (HK) (talk) 06:32, 7 March 2008 (UTC)
Protections typically come in the form of legislation —an infamous case being Englands Corn Laws, which preceeded the Irish Potato Famine of the mid-19th century. There are two main variants of economic protectionism, depending on whether the tariff is intended to be collected (traditional protectionism) or not (modern protectionism). The concept has frequently been associated with economic theories such as mercantilism, the belief that it is beneficial to maintain a positive trade balance, and import substitution.Here is the original text whuch is just fine, offer changes after it and we will discuss it. --Northmeister 05:10, 9 June 2006 (UTC)
Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over or competition. This contrasts with free trade, where no artificial barriers to entry are instituted.
The term is mostly used in the context of economic, where protectionism refers to policies or doctrines which "protect" businesses and living wages by restricting or regulating trade between foreign nations:
- Subsidies - To protect existing businesses from risk associated with change, such as costs of labour, materials, etc.
- Tariffss - to increase the price of a foreign competitor's goods. ( Including restrictive quotas, and anti-dumping measures.) on par or higher than domestic prices.
- Quotas - to prevent dumping of cheaper foreign goods that would overwhelm the market.
- Tax cuts - Alleviation of the burdens of social and business costs.
- Intervention - The use of state power to bolster an economic entity.
Protectionism has frequently been associated with economic theories such as mercantilism, the belief that it is beneficial to maintain a positive trade balance, and import substitution. There are two main variants of protectionism, depending on whether the tariff is intended to be collected (traditional protectionism) or not (modern protectionism).
Further protectionism did not cause the Irish Famine, that is intellectual dishonesty and I will not accept that in the article. It was the British policy towards the Irish which caused them to rely on a single crop - Smith wanted us (USA) to do the same with Agriculture as he wrote in Wealth of Nations that we would never become an industrial power - The lack of Irish control over their own affairs caused the famine - not protectionism or the Corn Laws. Feel free to offer any edits to the above paragraphs as originally there before your edits which I do not think improve the article. --Northmeister 05:10, 9 June 2006 (UTC)
- SV
I did not say, such "caused" the Famine, and it should be considered "intellectual dishonesty" for you to say I did. The Famine came about due to a number of converging factors - one of which was the 'hands off; laissez-faire economic policy, which, in reality meant 'hands off' with regard to helping the Irish, and Protectionism (ie. the Corn Laws, continued export to England of food produced in Ireland, etc.) I think we agree on the basics, and I will concede that mentioning the Corn Laws might be out of place, as it lacks critical context of (again trendy and simplistic) lassez-faire. You said "here is the original[sic] text whuch is just fine, offer changes after it and we will discuss it." Thats what that above version was, (here is the "original" version by the way) but anyway, here are a couple proposed changes below :
Protectionism, in its most generic sense, refers to any doctrine or policy which is claimed to protect (ie. enforce security) a group or entity by means of instituting mechanisms which restrict outside influences. In economics, protectionism refers to policies which which "protect" local industry and businesses by restricting or regulating trade between foreign jurisdictions, through methods such as:
Protectionism is in contrast to the concept of (idealised) free trade, where no artificial barriers to entry are instituted to prevent competition. The term "nanny state" refers to the a state which has deeply institutionalized protectionism for its industry, businesses, and elite social classs.
-Ste|vertigo 18:21, 9 June 2006 (UTC)
NM res
- Thank you for the response. I was out vacationing, so forgive me my long awaited reply. I don't mind your wording above. If your going to include nanny state, then we need a legitimate source that compares the two. Here is my suggestion:
Protectionism, in its most generic sense, refers to any doctrine or policy which is claimed to protect (ie. enforce security) a group or entity by means of instituting mechanisms which restrict outside influences.
In economics, protectionism is the policy of restraining trade between nations, through methods such as:
- Subsidies - To protect existing businesses from risk associated with change, such as costs of labour, materials, etc.;
- Tariffss - to increase the price of a foreign competitor's goods. ( Including restrictive quotas, and anti-dumping measures.) on par or higher than domestic prices.;
- Quotas - to prevent dumping of cheaper foreign goods that would overwhelm the market.;
- Tax cuts - Alleviation of the burdens of social and business costs.;
- Intervention - The use of state power to bolster an economic entity.;
in an attempt to protect domestic industries in a particular nation from foreign take-over or competition which would frive domestic industry out of business.
Protectionism has frequently been associated with economic theories such as mercantilism, the belief that it is beneficial to maintain a positive trade balance, and import substitution. Protectionism has also been contrasted to the concept of (idealised) free trade, where no artificial barriers to entry are instituted to prevent competition.
There are two main variants of protectionism, depending on whether the tariff is intended to be collected (traditional protectionism) or not (modern protectionism).
What do you think? I feel the above includes all that is needed for an opening to this article without taking out necessary information and including your information. Again, Nanny state stuff needs better sourcing. --Northmeister 01:10, 12 June 2006 (UTC)
Glen 10/19/06: I changed the text from "Tariffs" to "Protective Tariffs". There *is* a difference between a revenue tariff (say 10-15%) and a protective or prohibitive tariff (1500%), as the Wikipedia tariff article itself shows, and the point of the revenue tariff is to be collected, and hence by definition *not* to impel the person to buy the domestic product. The USA still maintains revenue tariffs of 2-5% for countries it does not have free trade agreements with--that's not protectionism, that's just regular, unpleasant taxation to help fill government coffers.
Criticism of protectionism
Sorry for citing only articles by Krugman - they were the most accessible and easily comprehensible ones I could find online by an economist of some repute. Anyone who can locate other sources should add them to help balance the article out. Thanks. Johnleemk | Talk 09:25, 19 November 2006 (UTC)
Free Market may help in the long run under ideal conditions, but in reality is that the case, or does it create a dependency on other countries, countries which could at a later time, impose sanctions and/or tarriffs or other restrictions on trade and cripple another country's economy (as history has shown economy is usually subservient to politics)Added reference and history
Added Lincoln reference. Lincoln described himself as a "high-tariff Henry Clay Whig" which he and the Whigs and the National Republican's of J.Q. Adams, and the Hamiltonians of Alexander Hamilton fame (and with agreement from Washington) were. --Northmeister 02:22, 22 April 2007 (UTC)
History...Reading the comments here, some do not understand American Economic History. America built herself and 'real' capitalism on protective tariffs. From 1860-1930's such was the policy and from then subsidy became the alternative to high tariffs. --Northmeister 02:22, 22 April 2007 (UTC)
A Protective Tariff is anything 40% and over historically. Anything under 40% is and was called a Revenue Tariff and this Jefferson, the Jacksonians, and early Democrats believed in and fought with the Federalists-National Republicans-GOP with until the 1930's when FDR reversed the protective tariff for revenue only through reciprocity (you lower yours to revenue basis and we will) and subsidy of industry. This worked well in the 1950's, 1960's but has failed us since the 1970's that had the double pain of an end to our stable currency (now on a floating market - thus why our dollar is becoming increasingly worthless and why prices always rise cutting the benefit of a higher wage). JUST A LITTLE HISTORY FOLKS. The Free Trade Agenda was loathed by American patriots from 1776 until the 1970's and was not and is not Capitalism as it was built in America. Read Hamilton, Carey (Lincoln's economist), The GOP platforms prior to modern era, and the ideas of Jefferson especially after the War of 1812 when Britain tried to kill our new factories with massive dumping of her goods. --Northmeister 02:22, 22 April 2007 (UTC)
- HEAR HEAR! Jefferson's idea of reciprocity should also be considered protectionist, since the free-traders scoff at Americanism.68.106.248.211 (talk) 14:43, 10 December 2007 (UTC)
- Ha Joon-Chang, Cambridge Professor, covers a lot of the plus side of the history of protectionism. It is missing here. But, for reasons of his own, Jefferson and the Slaveocrats were the laissez-faire party of the day. —Preceding unsigned comment added by 67.247.7.19 (talk) 04:10, 17 April 2011 (UTC)
Domestic protectionism
Why does this article limit protectionism to international protectionism? Protectionism can also be domestic. One state in the United States can have protectionist measures against other states. Or the national government can make it illegal for businesses to compete against other businesses including government owned businesses, and so on. Straight Cowboy 18:07, 31 May 2007 (UTC)
Good point
I think this has come up in recent US court cases involving restrictions on interstate wine sales and shipments.Mild Bill Hiccup (talk) 00:37, 8 December 2007 (UTC)
- The Commerce Clause in the Constitution prevents states from engaging in protectionism. Free-trade is good between the 50 states, free-trade is not good in all situations on international trade. The world is not black and white, the dogmatic free-traders will never understand.68.106.248.211 (talk) 14:38, 10 December 2007 (UTC)
Politics, Historical Context, and Inter-Industry
- politics and historical context: The emphasis on international protectionism has been accumulating since the Laisse-Faire authors - because domestic protectionism is less politically palatable/survivable. However, in Nations, Smith details as many (if not more) domestic examples as international. This does not mean that domestic protectionism does/has not exist(ed); but it tends to be ignored or stamped out, as compared to international protectionism. It is inaccurate for this article to take/push such a narrow view - and in fact it is a perpetuation of politicking (though likely unintentional).
- inter-industry: the most common form of domestic protectionism takes place amongst industries - one industry is propped up via subsidies - which can be to the detriment of other industries, and to the detriment of innovation within the favored industry.
Blablablob (talk) 19:25, 31 August 2008 (UTC)
- That's called corporate welfare, or you could say that industry has a "Comparative Advantage" by being in a state with corrupt politicians. Who are you to say that corporate welfare decreases innovation? They simply have a "Comparative Advantage", the way China has a "Comparative Advantage" with cheap labor.98.165.6.225 (talk) 13:50, 4 September 2008 (UTC)
- corporate welfare is another can of worms politically speaking, but yes subsidies are sometimes called corporate welfare. However, the spectrum of subsidies is broader than this, e.g. agricultural subsidies are not generally referred to as corporate welfare. and the key term is `can` as in it may be to the detriment of innovation - e.g. it can and sometime does drain limited resources away from the nascent industries and technologies that contribute to the strength of a nation in its future. Your usage of `comparative advantage` is a bit odd ... do you know to what it refers, or are you guessing based on the words? Regarding your comment about China, their cheep labor is what is called an absolute advantage. The essence of Comparative Advantage is that a nation can make more profitable use of its limited resources by focusing on its strengths. On the other hand, if your just angry and venting, then it doesn't really matter; but blogs are much better for that - they have more sympathetic audiences, and many are geared for opinion and commentary, whereas an encyclopedia is about dry facts, not argument over what to do. Blablablob (talk) 23:00, 5 September 2008 (UTC)
- Absolute Advantage= "The capability to produce more of a given product using less of a given resource than a competing entity en.wiktionary.org" Cheap labor or slavery is not an absolute advantage because it uses more labor inefficiently to produce the same product. Cheap labor and slavery is a "comparative advantage" because some countries abolished slavery where other countries have not.98.165.6.225 (talk) 01:55, 3 August 2009 (UTC)
- I think domestic protectionism in the intrastate-meaning is almost unique for the US; as most unions do not allow states to do such restrictions. I can't see a principal difference from international protectionism in that case. It just a bit fuzzy on what a "nation" is... Subsidies is of course a type of protection, but not usually seen as "protectionism". I think the article is clearer with the previous definition. --OpenFuture (talk) 19:48, 31 August 2008 (UTC)
- The introduction, before and after does include subsidies as a bullet point, so the definition in the introduction as a whole has not changed. Subsidies and reverse tariffs have been used and advocated in much the same way as tariffs and quotas - they are part of the same game (if knights and bishops are a part of chess, then so are rooks and pawns). It is artificial, even ingenuine, to not include subsidies in the game of protectionism. If you read economics journals and publications, and follow international trade negotiation, you will see subsidies mentioned all the time. Blablablob (talk) 23:15, 5 September 2008 (UTC)
"Current world trends" section of article
There seems to be something missing in the last sentence of the first paragraph of this section.Mild Bill Hiccup (talk) 00:37, 8 December 2007 (UTC)
Unsourced lie. Will someone please delete this consensus lie?
"However, according to several surveys of professional economists, 95 percent of economists support free trade, the highest percentage of agreement in any category."
This is the same type of bias claiming there is a consensus on Global Warming. The source of this statement doesn't even provide the 95% number. Second the source is the India Times, India is a biased ingrate beneficiary of American foreign aid (free trade).68.106.248.211 (talk) 14:35, 10 December 2007 (UTC)
- done202.76.173.243 (talk) 02:22, 23 February 2008 (UTC)
"Virtually All Economists Agree???
The article asserts, without citation to source, that "virtually all" economists agree that protectionism is harmful.
Setting aside what is probably a truism, that it is unlikely that "virtually all" economists agree on anything. This statement is certainly not a NPOV but outright advocacy.
Adam Smith himself argued for the use of tariffs whenever a trading partner engaged in unfair trade practices. John Stuart Mill believed in protectionism to encourage new industries. Keynes thought that judicious use of tariffs would increase domestic demand.
In our times, the Economic Policy Institute, a well-noted collection of economists, is very critical of unrestricted free trade and inclined to various protectionist strategies, as is the U.S. Business & Industry Conference. Robert Kuttner, Paul Krugman, Jeff Faux, Robert Reich, Barry Bluestone and Lester Thurow are examples of economists critical of free trade. The late John Kenneth Galbraith, past President of the American Economics Association, was in the forefront of critics of unfettered trade.
The assertion was over-reaching and should be altered.
LAWinans (talk) 12:35, 18 May 2008 (UTC)
- Whast happened to Krugman saying that if there was an economist's oath, it would contain the senatnce 'I believe in free trade'? You're vastly over-representing the case of the critics. The case was settled 150years ago. Larklight (talk) 14:13, 24 May 2008 (UTC)
- Citation is still needed, fellow propagandists. Are we dishonest propagandists now? Gee wiz.98.165.6.225 (talk) 08:44, 13 June 2008 (UTC)
You could try the rather obvious search [1]. [2] is one of many examples which traces this back to 1987, and gives If there were an Economist’s Creed, it would surely contain the affirmations “I believe in the Principle of Comparative Advantage” and “I believe in Free Trade” from Krugman, P. 1987, Is Free Trade Passé? Journal of Economic Perspectives 1(2) --Rumping (talk) 16:52, 10 May 2009 (UTC)
Bias
The entire article is a criticism of "Protectionism" (which in itself sounds to me like a perjorative term), or at least a balancing of the pros and cons of free trade. So why is a heavily non-neutral Criticism section needed? --70.142.54.69 (talk) 14:52, 6 July 2008 (UTC)
My main concern is the lack of attention to the impact of protectionism on the poor. When trade is restricted, poor producers suffer at least as much as poor consumers. DOR (HK) (talk) 04:34, 29 July 2008 (UTC)First off, how does protecting poor people's livelihoods cause them to suffer? Secondly, how exactly does free trade benefit anyone other than the very wealthy? Also, free trade will drive poor producers out of business first.174.130.37.250 (talk) 08:13, 3 April 2009 (UTC)
- The "protection" is not "protection of poor people's livelihoods". It's the protection of companies producing bad food, bad cars, at too high prices against imports from countries where those things are produced cheaper. So the poor suffer from this "protection" because they will have to pay too much for bad products. And the poor in those cheaper countries lose their job. Joepnl (talk) 15:28, 3 April 2009 (UTC)
- The goal of protectionism is not to produce bad food, bad cars, and high prices, but to protect the middle class from foreign quasi-slave labor. If slave labor is something to be desired then why do the anarcho-capitalist claim that slavery would have died out in the south because it was bad? Furthermore, items made by cheap foreign labor are not cheaper for the consumer in the 1st world, just like cotton made by slaves was not cheaper before 1860.98.165.6.225 (talk) 22:31, 5 May 2009 (UTC)
- This article should not only deal with the goal of protectionism (surely, we all have well-meaning goals) but also its results. Also, isn't "quasi-slave labour" a synonym for "not slave labour, but I'm going to switch in the next sentence to arguing on the basis that it is slave labour". 212.56.120.79 (talk) 03:16, 21 August 2011 (UTC)
Facts are unbiased
I see that a lot of the discussion is focused on the good or ill effects of protectionism - but none of that is directly relevant to the factual content of an encyclopedia.
Whether you see protectionism as good, or as bad, it still has the same meaning, the same mechanisms, and so forth. Likewise, if nations do or don't play fair.
Position pieces have different, better outlets than Wikipedia: political websites, blogs and etcetera.
The discussion page of an encyclopedia is a better place than the article for potentially biased content, of course - but ultimately, the primary purpose of the discussion page is discussion of factual content and the presentation thereof. Blablablob (talk) 23:29, 5 September 2008 (UTC)
Agreed: this article needs more facts. Here's one: there are no examples of highly successful, prosperous nations that practice highly restrictive protectionism, and there are no examples of unsuccessful, poor naitons that practice free (or, near-free) trade. DOR (HK) (talk) 08:23, 9 December 2008 (UTC)
- The United STates became a highly prosperous nation between 1870 and 1912, where America First Republicans ran the country, not treacherous internationalist free traders.98.165.6.225 (talk) 00:40, 24 December 2008 (UTC)
Editing list of protectionist policies
I have expanded on the list of protectionist policies and moved it to its own section. Some of the policies of the list are not actually protectionist policies, although they are related to them. For instance, a subsidy on exports is equivalent to a subsidy on imports in a floating exchange rate economy, and will increase trade, not decrease it. Please comment here on what you think the list should look like. lk (talk) 08:09, 6 September 2008 (UTC)
- I agree with your inclusion of subsidies...
I see your point regarding technically protectionist; but an encyclopedia article should reflect usage of the term, which is broader than the definition you would find in pedagogical source. That includes economics discourse, as well as economics centric coverage and considerations of politics. Blablablob (talk) 14:16, 15 September 2008 (UTC)
Political Boundaries is more accurate
I would suggest that defining protectionism along political boundaries is more accurate. Historical examples abound, as do recent and current - such as in Europe, and emerging economies. Additionally, this would facilitate more depth. Blablablob (talk) 04:49, 15 September 2008 (UTC)
- I would agree that tax on trade across political boundaries is a more accurate description of tariffs. However, with the term protectionism, it's a bit less clear. Do you mean that the lead should be changed thus?
Protectionism is the economic policy of restraining trade across political boundaries, through methods such as tariffs on imported goods ....
- I'm agnostic about this change, but go ahead if you feel it would be better. lk (talk) 14:43, 15 September 2008 (UTC)
- something like that Blablablob (talk) 23:09, 15 September 2008 (UTC)
Scope
After looking over the history and discussion on other articles, I expect this article and talk page to evolve a great deal. So some of what I'm putting in here is for the long view. I expect that other authors are reading this material, just as I've recently read over the discussion pages of other articles.
Administrative Protectionism
Regarding expanding and yet limiting the scope of what protectionism constitutes, I'll bring up the idea of administrative protectionism - e.g. the USDA as a form of protectionism. I would say that it is not, because the USDA was not instituted to prop up, or protect any industry; that protectionism is at some level intentional, with the specific motive of protecting a factory, company, industry, or simply the domestic economy generally.
On the other hand, an obtusely bureaucratic domain can achieve the protectionist aim through red tape - and this is often considered protectionism. In motivation and effect, there may only be an essentially ostensible difference between licensing and permits, and outright quotas - some nations are (have been) notorious for this. On the other hand, corruption in administrative bodies is yet an other phenomena, and not protectionism in itself, but may come up in free trade talks and in discussions of a nation's progress toward free/efficient markets. Reluctance to redress, may reflect protectionist proclivities of that nation.
Earmarks and Pork
Earmarks and pork are usually not considered protectionist subsidies.
others
There are several other candidate mechanisms as well, and each should be considered case by case. Organic yes, but still logical and organized. Blablablob (talk) 08:33, 16 September 2008 (UTC)
Hidden Protectionism e.g. by Standards
Please, take note, that even countries that proclaim free trade, follow implicit protectionistic policies to foster their home economiy, e.g. by defining specific standards or - as some would state - by creating laws for patent protection (ongoing discussion about software patents, copyright violation in China etc.) —Preceding unsigned comment added by 84.60.76.174 (talk) 13:35, 28 February 2009 (UTC)
- U.S.C. Article I Sec 8: The Congress shall have power to... promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries; (See Libertarians believe in un-Constitutional or extra-Constitutional doctrine. In this case the free traders are un-Constitutional. The Free Traders wish to replace the US Constitution with something more sinister and evil.)98.165.6.225 (talk) 01:45, 3 August 2009 (UTC)
What's the opposite of Protectionism (when states prefer imports over local products)?
You might doubt that there is such policy (which most people would call straight forward "stupidity"). But in some segments there is a clear pattern of public biddings demanding products of foreign origin as opposed of local products (sometimes even if local products have been funded by taxes and public money). —Preceding unsigned comment added by 84.60.76.174 (talk) 13:38, 28 February 2009 (UTC)
Neutrality?
Much of this article seems to criticize protectionism and support free-trade. It's fundamentally imbalanced and non-neutral, and from the looks of the discussion page, many editors want it to stay that way. So much for objectivity. —Preceding unsigned comment added by The Phool (talk • contribs) 22:19, 2 April 2009 (UTC)
Market reserve
In Brazil , until the government of Fernando Collor in 1990, there were thousands of "market reserves", when no foreign product could be imported for Brazilians.The article forgets this kind of useless protectionism. In fact, protectionism was (and remains) terrible for Brazil and Latin America.The word "protectionism" became equal to hight prices and low quality.Agre22 (talk) 01:34, 27 June 2009 (UTC)agre22
- Indeed, this has been the experience in most developing countries – protectionism leads to high prices and low quality, and an increase in preference for foreign made goods. We should address this experience, as part of the effort to globalize wikipedia. However, we need to find some reliable sources that address this issue. LK (talk) 09:32, 27 June 2009 (UTC)
Use of term as a perjorative
These days members of the WTO use the word "protectionist" as a perjorative, i.e. something undesirable. This belongs in the article somewhere. GreySun (talk) 17:03, 17 September 2009 (UTC)
Most/many
A line in the article was recently changed from "Many modern economists agree that protectionism is harmful in that its costs outweigh the benefits..." to "Most modern economists agree that protectionism is harmful in that its costs outweigh the benefits...", but neither source backs that up. Unless a source can be found, I'm going to change it back. Lapsed Pacifist (talk) 23:15, 10 December 2009 (UTC)
- "Most economists" thought NAFTA was great, but that turned into a disaster.98.165.15.98 (talk) 15:53, 21 March 2010 (UTC)
"The "Comparative Advantage" argument has lost its legitimacy"
The sentence Free capital mobility totally undercuts Ricardo's comparative advantage argument for free trade in goods needs more sources than Herman Daly. Exceptional claims require exceptional sources, even when this claim is made in a arguments section. Needless to say, I highly doubt the claim myself. Joepnl (talk) 01:15, 23 February 2010 (UTC)
Whether you doubt the argument or not, it is an argument for protectionism and should stand.
If you believe the argument has no merit, you should reference it in the arguments against protectionism. —Preceding unsigned comment added by Teaser47401 (talk • contribs) 17:04, 23 February 2010 (UTC)
- i'm not going to source, but i can explain it a bit. it's really about uneven labour markets. portugal and england had comparable population densities; china and the united states do not. as disproportionately higher population densities will drive down wages, thereby increasing profits, the free mobility of capital will always lead to production preferring countries with higher population densities. this creates a consumer-producer relationship rather than a true trading one. but, it also leads to mass unemployment in the consumer countries, as nearly all production is moved elsewhere. now, look around the world: seem familiar? in the long run, as consumers are increasingly unable to buy from producers, it should lead to decreases in production in the producing countries, as well. then, production should return to the consuming countries, but at wages driven by global rather than local labour markets. the end result is deflation, as wages collapse. ricardo's comparative advantage has been flipped on it's head: both sides are worse off.
References
I read the Greg Mankiw paper, reference #3, and I don't think it's applicable. It's cited to support the statement that most economists agree that protectionism is bad. But the paper endorses Pigovian taxes on gasoline. The relevance to protectionism and it's vices or virtues is tacit at best. I think the reference should be removed, and replaced with a more relevant one.
Can this be reviewed, to corroborate my view, or to give anyone who disagrees a chance to make their case. Otherwise, when I come back to check, I'll locate a reputable source to support the statement and replace the reference. —Preceding unsigned comment added by Raolyn13 (talk • contribs) 00:10, 25 February 2010 (UTC)
- Another reference is welcome, but the Mankiw paper cited is relevant because it has this in the introduction: "For example, economists are generally supportive of free trade among nations, while the public is more skeptical. Economists oppose rent control, while much of the public supports the policy." LK (talk) 10:47, 25 February 2010 (UTC)
- Well that's an assertion that Mankiw makes, and it's not substantiated in his paper, nor is it the point of his paper. I think it's important to get this one right. It's true that considerably more economists think protectionism is harmful and free trade is better. But there's still a sizable, respected portion who disagree. It's so easy to tacitly suggest protectionism is no longer considered a legitimate econ policy, but I'd like to avoid suggestion that here while illustrating that the majority is more than just a simple majority. Krugman is cited in the next sentence, so there goes my first choice alternative. But we need a good source and then a well-worded statement here to keep this objective. Raolyn13 (talk) 22:27, 3 December 2010 (UTC)
Restrain'ism?
The first sentence of this wiki article:
"Protectionism is the economic policy of restraining trade between states.."
It's called Protectionism not Restrain'ism. The goal of protectionism isn't to restrict trade but to "protect" your State from unfair trade practices and/or build up your state's manufacturing.98.165.15.98 (talk) 16:00, 21 March 2010 (UTC)
Another unsourced lie
"Most modern economists agree that protectionism is harmful in that its costs outweigh the benefits, and that it impedes economic growth."
This is an opinion not a fact. And when that's the case then this sentence needs to be quoted with quotation marks as opinion and not stated as plain fact.98.165.15.98 (talk) 21:49, 2 April 2010 (UTC)
Protectionism in the United States
"Free trade and protectionism are regional issues. Free trade in America is the policy of economics developed by American slave holding states and protectionism is a northern, manufacturing issue. Although not as animating an issue as slavery..."
Actually Tariffs was the singular "animating issue" which drove the Civil War, not slavery. The Confederates seceded because of Tariffs, not slavery.98.165.15.98 (talk) 21:53, 2 April 2010 (UTC)
The Protectionism Policy for Australian Aboriginals (1901-1937)
The protectionism policy was brought about because the Europeans settlers believed that the aboriginal people were not self-sufficient; they couldn't manage themselves and therefore needed their assistance. This sort of a view was dominant within the European society due to the lack of a 'constitution' or 'government' within the Aboriginal community:the aboriginal people had infact, verbal rules for their society, but these were hard for Europeans to understand, as they were accustomed to their way of governing a country. The main factor which caused the great divide between the Europeans and Aborinal people was because of their differences in spiritual values, which relates back to the 'Dreamtime' in the Aborginal religion. Thus, Europeans declared the Australian soil as terra nullius (no-man's land) and decided to take control.
The protectionism policy which lasted from 1901-1937, was based on the idea of paternalism; Europeans were like a fatherly figure to the Aboriginal people. During the protectionism policy, every state in Australia, had its own set of rights for Aboriginal peoples. Aboriginal people did not have the same rights as European settlers at the time, and this continued uptil the introduction of the 'Self Determination' policy in 1972. The protectionism policy allowed aboriginal people to be put into reserves; land that was allocated by the government and in return, aboriginal people were provided with food supply, education and the Christian religion practises. Apart from that, several aboriginal people were sent over to war,and many did not receive any recognition for their efforts in fighting for Australia, because they were not recognised as Australian citizens up until then.
The protectionism policy later developed another policy, known as the Assimilation policy, which lasted from 1937-1967. The assmilation policy was the removal of aborginal children from their homes into European families, so they could be taught the European way of life, with education, food, shelter and the Christian religion. From the assimilation policy came out the stolen generations, which refers to the children who were removed from their homes. There are cases where children suffered from mistreatment and there are cases where children, (who have now grown up into adults) and have not suffered such consequences at all in their past. However, there is a common sense of loss of identity, culture and family relationships within individuals today as well. — Preceding unsigned comment added by No2Rehash (talk • contribs) 13:04, 16 August 2011 (UTC)
Is this not biased?
Under "Protectionism in the United States," the last paragraph very much looks like a partisan, biased argument, the kind you would find perhaps on Fox News. The most notable part goes as such:
"Northern Progressives sought free trade to undermine the power base of Republicans – Woodrow Wilson would admit as much in a speech to Congress. However, he was busy enacting the JIm Crow laws that would shame the country for eternity. A brief resurgence by Republicans in the 1920s and the tax cuts they implemented saved the nation. Woodrow Wilson's ideological understudy[citation needed], Franklin Roosevelt, would essentially blame the Great Depression upon the protectionist policies exemplified by the previous Republican President, Herbert Hoover.[citation needed]However, this was just political postering as history would prove."
Does anyone else here also see something partisan in this? -- And Rew 09:45, 2 September 2011 (UTC)
- Yes, these are biased additions by someone with poor capitalization ("JIm Crow") and spelling ("political postering"[sic]). Dhsu (talk) 15:30, 7 September 2011 (UTC)
Article needs major work
There are a host of problems with this article. For starters, the article states "protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market, where there is no such total loss." There's no source here, but I'm sure one could be found supporting this argument, just as I'm certain you can find studies which come to the opposite conclusion. Economics isn't a hard science. Anyone who makes virtually any blanket assertion when it comes to economics is full of it. There are arguments, theories (but not "theories", as the term is used in, say, physics), studies, etc. But, no absolute laws of economics.
Next, "Most mainstream economists instead support free trade"? I looked at the sources sited, and I couldn't find any scientific surveys which support this claim. Unless someone can point to such a survey, what it should say is that "some mainstream economists..." This assertion is repeated, stating "Most economists, including Nobel prize winners Milton Friedman and Paul Krugman, believe that free trade helps workers in developing countries..." Again, "most" is unsourced.
I was going to post all the problems with this article, but the list is too long. Please note that I am NOT arguing in favor of protectionism. I am arguing in favor of an unbiased article. There needs to be an explanation, including citations to economists who support protectionism. And, there needs to be a healthy argument against protectionism in the criticism section (or elsewhere, as appropriate.) But, this article, as-is, amounts to propaganda.
I would very much like the assistance of other editors in fixing this article. However, if you are under the impression that a pure free market economy has somehow been objectively proven superior to an economy that utilizes protectionism, or that an unfettered free market economy has been proven inferior to, say, a socialist state, you really have no business editing this page.JoelWhy (talk) 19:21, 17 January 2012 (UTC)